Vote `Yes' On Amendment No. 2

To Curb State Government Spending

October 24, 1994

Taxpayers may disagree about many issues, but on one matter they are united: Government at all levels needs to be put on a strict fiscal diet to curb its enormous appetite for taxes and to make it leaner. On Nov. 8, Florida voters can begin to do that by voting YES on proposed state constitutional Amendment No. 2, "Limitation on State Revenue Collections."

It limits the annual percentage increase in certain state revenues to the average increase in state personal income over the last five years. Between 1983 and 1993, lawmakers estimate, it would have cut state revenues by $23 billion. The current state budget is $38.6 billion.

The amendment was placed on the ballot by state lawmakers to tackle a serious problem. Taxation and spending in Florida are out of control. Since 1983, inflation is up 44 percent, Floridians' personal income is up 109 percent, but state spending - financed by new taxes and tax increases - has jumped a whopping 196 percent.

Florida has moved from a low to a moderate level of taxation and is headed higher. It now has the 30th highest per-person state and local tax burden out of the 50 states - $1,922 per year. (The national average is $2,173.) The state tax burden on each person rose from 5.5 percent of spendable income in 1983 to 6.4 percent in 1992.

The revenue limit is fair. It reflects suggestions by the former Florida Taxation and Budget Reform Commission and Florida TaxWatch Inc. to link spending to growth, inflation and ability to pay.

Excess revenue collected over the limit must first be placed in Florida's budget stabilization fund, the "rainy-day fund," until it reaches its required level. After that, any excess must be refunded to taxpayers.

The revenue limit includes state taxes, fees, licenses and service charges. It excludes money used to pay off state bonds, Medicaid matching funds, state lottery prizes, hurricane catastrophe fund money, leftover funds from past years, local government taxes, licenses and fees or revenues from future constitutionally imposed state taxes, licenses, fees and service charges.

The revenue limit must be adjusted to reflect the fiscal impact of any transfers of responsibility among state, federal and local agencies. There is also an emergency valve: Lawmakers, by a two-thirds vote of both houses, could override this revenue limit with a single-subject bill spelling out how the money is to be spent.

If enacted, the impact of the amendment should be carefully monitored by lawmakers and groups like TaxWatch, with an eye toward any necessary fine-tuning.

Caution is in order: While government critics can spotlight vast amounts of waste, Florida also has billions of dollars of unmet needs. Too tight a revenue limit could block efforts to meet those needs. The revenue limit is an important first step to compel lawmakers to get serious about streamlining government, trimming fat and inefficency and eliminating low priority or ineffective departments and programs.

Twenty-two other states have already enacted some form of a government revenue cap. Florida should be No. 23.